UPDATE 2-Meirelles may forgo Brazil Senate race-minister

* Bernardo remarks further signal Meirelles to stay

* Investors attentive to any changes in central bank

* Meirelles on Thursday signaled he could stay
(Adds details, Lula comments, Twitter link)

By Rodrigo Viga Gaier and Guillermo Parra-Bernal

RIO DE JANEIRO, Feb 12 (BestGrowthStock) – Brazilian central bank
president Henrique Meirelles could forgo running for a seat in
the Senate, Planning Minister Paulo Bernardo said on Friday, in
the latest signal that Meirelles could remain at the helm of
monetary policy through the end of his term in December.

Bernardo told reporters in Rio de Janeiro that President
Luiz Inacio Lula da Silva wants Meirelles presiding over the
central bank until the end of the year.

On Thursday, Meirelles reiterated he will only decide
whether to run for public office at the end of March, and his
focus remains on the central bank.

Meirelles’ comments helped ease concerns among investors
that he could leave the bank to pursue a political career ahead
of the October presidential election — often a period of
swings in local markets.

“He (Meirelles) told me he won’t run for governor and
already told me that he won’t be in the Senate race,” Bernardo
said.

Asked whether one of Meirelles’ options was the Senate,
Bernardo said “I don’t think so, that is what he told me.”

Local media have reported Meirelles could also run for the
vice-presidency as a running mate of Dilma Rousseff, the
governing Workers’ Party’s presumed presidential candidate.
Meirelles, a former FleetBoston global vice president, ruled
out a try for the governorship of Goias state in Midwestern
Brazil.

Lula told a regional newspaper in an interview published on
Friday that he wants Meirelles in his cabinet “until the last
day of my term.”

“His performance at the helm of the bank deserves all types
of praise (and) has been key to controlling inflation,” Lula
said, adding that Meirelles’ quitting his post to run for
office is “a personal decision.”

Meirelles, Brazil’s longest serving central bank chief, has
been credited by local and foreign investors with helping
stabilize an economy that was on the verge of default when he
took office in January 2003. His policies helped bring
inflation to less than 5 percent from about 12 percent in
2002.

He also helped the government refinance the bulk of its
debt, improving terms and stretching out maturities. He has
also presided over a massive strengthening of the currency and
the accumulation of more than $240 billion in international
reserves.

Bernardo tweeted earlier on Friday that Meirelles had vowed
to remain at the central bank until at least the start of
2011.

“Yesterday Meirelles went to President Lula’s confessional
and renewed his contract for another season. I loved it!,”
Bernardo wrote on the microblogging site Twitter.

The yield on the interest rate futures contract due in Jan.
2011 (DIJF1: ) edged slightly higher, rising to 10.28 percent
from 10.27 percent on Thursday. After Meirelles’ statement on
Thursday, yields on the shorter terms fell, indicating
Meirelles would be willing to raise the benchmark Selic rate
gradually if he stayed.

Trading in most financial markets in Brazil will likely be
thin on Friday as this weekend marks the start of Carnival in
the country.

To see Paulo Bernardo’s Twitter account, please click on
[http://twitter.com/Paulo_Bernardo]

Stock Market Advice

(Additional reporting by Paula Laier, Silvio Cascione and
Luciana Lopez in Sao Paulo and Isabel Versiani in Brasilia;
Editing by Padraic Cassidy)

UPDATE 2-Meirelles may forgo Brazil Senate race-minister